Category: Repurchase Agreements (Repos)

Both the SEC and FINRA recently released their 2019 Examination priorities, (available here and here) highlighting primary areas of focus for 2019. While there are no surprises, there are some items that have a unique twist that warrant attention. In this post we provide an overview of the regulators focus on Reg SHO and short … Continue Reading

On the heels of remarks by his U.S. Commodity Futures Trading Commission (“CFTC”) counterpart, U.S. Securities and Exchange Commission (“SEC”) Chairman Jay Clayton recently commented on ongoing benchmark reform and the transition to the Secured Overnight Financing Rate (“SOFR”). As we noted earlier this week, Chairman J. Christopher Giancarlo of the CFTC recently advocated for … Continue Reading

On November 29, 2018, in remarks before the 2018 Financial Stability Conference in Washington, D.C., Chairman J. Christopher Giancarlo of the U.S. Commodity Futures Trading Commission (“CFTC”) supported the adoption of the Secured Overnight Financing Rate (“SOFR”) as the new benchmark for short-term unsecured interest rates. SOFR is currently produced by the Federal Reserve Bank … Continue Reading

On November 6, 2018, the U.S. Securities and Exchange Commission (“SEC”) brought an enforcement action against a (formerly) registered investment adviser (“Adviser”), for failing to meet its diligence and compliance responsibilities under the Investment Advisers Act (“IAA”) relating to certain repurchase agreement (“repos”) facilities it offered to its clients. The Adviser offered nine repo facilities … Continue Reading

Last month, on July 10, 2018, the Office of Financial Research (“OFR”), an agency of the U.S. Department of the Treasury, proposed a new rule that would require collection of data with respect to centrally cleared repurchase agreement transactions (“repos”) (the “Proposed Rule”). The proposal stems from a multi-year effort by the Financial Stability Oversight … Continue Reading

On April 3, 2018 the Federal Reserve Bank of New York (“Fed”) started publishing its three repo rates: the Secured Overnight Financing Rate (SOFR), the Broad General Collateral Rate (BGCR) and the Tri-Party General Collateral Rate (TGCR). For an overview of differences between the composition of each of the rates please refer to our prior … Continue Reading

The Federal Reserve Bank of New York (FRBNY) released the monthly statistics of the U.S. tri-party repo market for October 2017. Tri-party repo statistics are available on a consolidated basis through the FRBNY’s tri-party repo interactive tool (available here) and master excel data file (current version here and click on Downloads). … Continue Reading

The Board of Governors of the Federal Reserve System (Fed Reserve) recently issued a final rule entitled “Restrictions on Qualified Financial Contracts of Systemically Important U.S. Banking Organizations and U.S. Operations of Systemically Important Foreign Banking Organizations; Revisions to the Definition of Qualifying Master Netting Agreement and Related Definitions” (hereafter the “Final Rule” and available … Continue Reading

The Federal Reserve Bank of New York (FRBNY) released the monthly statistics of the U.S. tri-party repo market for September 2017. Tri-party repo statistics are available on a consolidated basis through the FRBNY’s tri-party repo interactive tool (available here) and master excel data file (current version here). … Continue Reading

The Federal Reserve Bank of New York (FRBNY) continues to track and release monthly statistics of the U.S. tri-party repo market. This post concerns the April 2017 through August 2017 statistics (the “Five-Month Period”). In March 2017, the FRBNY discontinued publishing the PDF and excel files containing single month statistics to which we have ordinarily … Continue Reading

Recently the Liberty Street Economics blog on the Federal Reserve Bank of New York’s website published a post entitled: “Regulatory Incentives and Quarter-End Dynamics in the Repo Market.” The post explores the quarter-end repo dynamics of the U.S. repo market for U.S. Treasury securities and primarily focuses on the impact that the leverage ratio has … Continue Reading

On August 22, 2017 the Board of Governors of the Federal Reserve System (“Fed”) issued a notice and request for comment (the “Notice”) with respect to the proposed publication by the Federal Reserve Bank of New York (“FRBNY”) of three overnight repurchase agreement rates on U.S. Treasury securities. The Notice states that publication of the … Continue Reading

In a remaining vestige of the financial crisis, the U.S. Bankruptcy Court for the District of Delaware (“Court”) recently issued an opinion upholding a repo counterparty’s sale of collateral following the insolvency of the counterparty to the repo. The Chapter 7 Trustee for the insolvent counterparty had challenged the sale on the basis that the … Continue Reading

On June 14, 2017, the Federal Reserve Bank of New York (FRBNY) issued an update on the operation of their reverse repo program (RRP). The update indicates that the offering rate on the RRP will be 1.00% following the Federal Open Market Committee’s (FOMC) meeting on June 13-14, 2017 and their decision to maintain the … Continue Reading

On May 24, 2017 the Federal Reserve Bank of New York (FRBNY) published an update on their efforts to create and publish three Treasury repo benchmarks. The FRBNY had previously announced its efforts to create such benchmarks in November 2016 (see our prior post here). The update announced changes to the contemplated make-up of the … Continue Reading

The Federal Reserve Bank of New York (FRBNY) released their monthly statistics of the U.S. tri-party repo market for March 2017. Beginning with the March 2017 data, the FRBNY will no longer publish the PDF and excel files containing single month statistics to which we ordinarily provide a hyperlink. Instead, tri-party repo statistics will only … Continue Reading

The Federal Reserve Bank of New York (FRBNY) continues to track and release monthly statistics of the U.S. tri-party repo market. This post concerns the December 2016, January 2017 and February 2017 (the “Three-Month Period”) statistics.… Continue Reading

One great thing about a new Congress is that bills pending at the end of the prior Congress must be reintroduced. This wipes the slate clean of problematic proposals and reduces the risk of something slipping through without sufficient debate. For example, the proposed Bankruptcy Fairness Act of 2016 (BFA) expired with the 114th Congress. … Continue Reading

In a previous post we summarized the FRBNY’s announcement that it was considering publishing three benchmark repo rates. Recently the Liberty Street Economics blog (available on the FRBNY’s website) explored the goals of the proposed benchmarks as well as how each benchmark would have performed over the period from August 2014 to October 2016. Highlights … Continue Reading

On Friday, the Federal Reserve Bank of New York (FRBNY) announced that it, together with the Treasury Department’s Office of Financial Research (OFR), is considering publishing three benchmark rates for repurchase agreement (repo) transactions collateralized by Treasury securities (Benchmark Rates). … Continue Reading

Effective September 2, 2016, the Federal Reserve Bank of New York (FRBNY) revised the reverse repurchase transaction (RRP) counterparty eligibility criteria with respect to money market funds (MMFs). The revisions expand the set of potential RRP counterparties. The FRBNY expects the number of RRP counterparties to be 150 as a result of the revisions.… Continue Reading